Cognitive Skills, Gender and Risk Preferences

Alison Booth and Pamela Katic ()
Additional contact information
Pamela Katic: Australian National University

No 6997, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In this paper we utilise data from a unique new birth-cohort study to see how the risk preferences of young people are affected by cognitive skills and gender. We find that cognitive ability (measured by the percentile ranking for university entrance at age 18) has no effect on risk preferences measured at age 20. This is in contrast to experimental studies that use IQ measures to proxy cognitive skills. However we do find that gender matters. While young women are significantly more likely than young men to assess themselves as being prepared to take risks, women choose to invest significantly less when they are confronted with a clearly specified investment decision based on hypothetical lottery winnings. This difference between the impact of gender on risk attitudes and the hypothetical lottery investment suggests that impatience and framing affect young women and men differently.

Keywords: cognitive ability; risk preferences; risk attitudes; gender (search for similar items in EconPapers)
JEL-codes: D01 D80 J16 J24 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2012-11
New Economics Papers: this item is included in nep-cbe, nep-dem, nep-ent, nep-exp and nep-neu
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published - published in: Economic Record, 2013, 89 (284),19-30

Downloads: (external link)
https://docs.iza.org/dp6997.pdf (application/pdf)

Related works:
Journal Article: Cognitive Skills, Gender and Risk Preferences (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp6997

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().